I started a new Business. Here are some of the things that happened before Day 1:
- Commercial Real Estate: A little different than rental properties. We negotiated using TAR-2101 form. You can see a real commercial lease example here.
- Labor: I planned to rely on my favorite handyman from rental properties and a tenant I would hire to leave his mechanic job.
- Financing: I decided I would figure this out as I went. You never get to have all the pieces before you jump.
About The Business
I’m not sure yet how much to disclose. I’ll tell you it’s a local business, serving a 50 mile radius or so. It’s sort-of retail, sort-of Real Estate related. It involves labor and a little bit of technology.
I always wanted to run a small business. Having a direct impact was always more interesting to me than managing a billion dollar demand plan in foreign factories I never saw. I don’t mind the long hours, and I like the long-term investment component. I like being in control of my own earnings.
I have also always thought about consultants / strategy people.. if you’re so good at giving advice, Mr. Consultant, why aren’t you doing it?
Learning The Business
I had been running my own service-type business for three years, and Rental Properties for closer to ten years. I had worked in Corporate America before that for almost ten years.
I went to work for a friend/partner/mentor in his small business for about two years. I worked in all the departments and saw all the ugly pieces about entrepreneurship. Your driver cut someone off in traffic? That phone call goes to you. Your employee damaged something at work for $50k? You deal with insurance. Constant cashflow issues. Hiring, firing, motivating, selling. Working with difficult customers. Invoicing. Suppliers.
I called it “eating a shit sandwich”, and wanted to do it anyway.
Finding The Property
This part was familiar. I wanted to a showroom, a warehouse, offices, loading docks, and to have on-site quarters. I wanted to own and a fixer-upper. I wanted to buy, not build.
This meant I had to live really far from my prime demographic area. Later this will show up in managing fuel costs.
I found an abandoned property that met my needs. It’s been empty 10 years — perfect.
Shouldn’t be a problem, right? I’m already in the industry, know the people, and am ready to buy. Ha. this one will bite me in the ass later.
Everything Falls Apart, Part 1
Most people probably would spend a million getting this kind of operation running. I was trying to do it for like.. $50k. Maybe $100k with contingencies.
I had informal verbal deals with the suppliers. I had an informal verbal deal with my labor. I had a 1″ stack of documents and gave them to the bank to start financing. Juggling a lot of balls.
One mentor suggested I offer an amount about 1/3 of asking price since it’s been empty so long. I thought that wasn’t in good faith so offered a little under asking.
<sidenote> … Nobody in this industry takes you serious until you are established. Oh, you are starting your own place? Great, give me a call once you have all the financing and land and trucks and blah blah blah .. everyone else is a waste of their time. So you can’t do much until you have something, and it doesn’t help I look really young. Takes money to make money?</sidenote>
So I made the offer on the place. The owner countered. I thought about it for a day. I then did an unusual thing — I met full asking price and all conditions in the counter. I’m all in.
So then I have a friend who tells me they heard around town about my business opening, but they get the details wrong.
Where did my friend hear the wrong details? I start to think my 1″ stack of documents made it’s way around town.
Well that sucks for any sense of privacy, but oh well.
But how odd they got the type of business wrong.
Then … inexplicably.. I get a notice that the property has been sold to someone else.
I met the full counter, right? What else did you want? It’s been empty 10 years! How is it possible they got two offers on the same day, after ten years of no offers? Nobody told me there was another interested party.
I was 99% sure this was my new business, new location. I had spent a tremendous amount of money buying all the things necessary to outfit the offices, the warehouse, getting employees, etc. It was piling up in closets and car trunks and garages. I had already started to move out of my old place.
I was crushed. I spent the next several months trying to figure out what the hell to do next. Stay tuned, this story isn’t over.
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